SINGAPORE: Palm oil may retest a resistance at 3,796 ringgit per tonne, a break above which could lead to a gain into 3,847-3,897 ringgit.
The consolidation within a narrow range of 3,631-3,796 ringgit obscured the trending signals that had been pointing south.
The pause of the drop simply increases the chance of a further gain towards the Sept. 13 high of 3,912 ringgit.
Wave pattern suggests the development of a wave c which is capable of travelling into a range of 3,897-4,062 ringgit.
Palm oil may fall into 3,481-3,583 ringgit range
However, this wave won’t be confirmed until the contract breaks 3,796 ringgit, as the consolidation may turn out to be a bearish continuation pattern.
A break below 3,694 ringgit may be followed by a drop towards 3,542-3,608 ringgit range. On the daily chart, trending signals look neutral while the contract is stuck within the range of 3,647-3,891 ringgit.
An escape could suggest a direction.